A Video About Selecting and Working With Counsel

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In instances where insurance claims may entail litigation, insurers must move quickly to engage counsel. When an attorney is retained to defend a person insured, the fact should be documented in writing by the attorney, the adjuster, and the insured who is to be defended.

Before an insurer retains an attorney to represent an insured to defend an insured who has been sued for a tort the claims person should be certain the lawyer is competent to defend the insured. This can be accomplished by attending a trial conducted by the lawyer where the claims person can evaluate the lawyer’s competence at trial. If that option is not available the claims person should seek recommendations from other insurance claims professionals who have retained the lawyer in the past or the insurance company’s list of approved defense lawyers who have been evaluated by the insurer’s management.

If the attorney is being retained for the first time by the insurer, the insurer should obtain an engagement letter from the attorney setting forth the terms and conditions of the retention and signed by the attorney, the claims person, and the insured. If the attorney or law firm has an ongoing relationship with the insurer, only the person being defended need sign an engagement letter.

The claims person must understand that an engagement letter is an effective contract between the lawyer and the insurer. As a matter of law, there could not have been an implied contract between Plaintiffs and Gulley, personally. Because the Court has decided the implied contract issue as a matter of law based on undisputed facts, the issue of whether there is a factual dispute regarding the existence of an implied contract is moot. Like an insurance policy a lawyer’s engagement letter will be read as written if there is no ambiguity.

Whenever an insured is sued and requires a defense or the insurer is sued, the insurance adjuster and the defense attorney must understand their respective roles in preparing the case for trial. They must develop a rapport with each other and with the insured person or entity that is being defended, to make communication easier to maintain. Bad faith lawsuits and poorly tried bodily injury cases seem to arise when the adjuster and the defense attorney fail to communicate regularly with each other and the policy holder.

ZALMA OPINION

How to effectively retain a lawyer is important to everyone. It is essential to an insurance claims person who is called upon to retain a lawyer to represent the interests of a person or entity insured.